British Telecom Fielding Offers

Debt: Reports say $11-billion bid for local network unit rejected, stake in Italian firm to be sold for $570 million.

LONDON — British Telecommunications, which is trying to reduce debt of about $25 billion, received and rejected an $11-billion offer for part of its local phone network. It also is close to selling a stake in an Italian unit, British newspapers said, without citing sources.

British Telecom spokesman David Orr declined to comment on a report in the Sunday Times that the company has received a bid for the unit that runs the so-called local loop for Britain's second-largest phone company. Orr also declined to comment on a report in Sunday Business that it was close to selling its 20% stake in Italian wireless company Blu for $570 million.

"Preliminary discussions relating to the offer have been held with BT and Earth Lease remains hopeful that substantive talks with the senior management of BT will commence in due course," Earth Lease, the group of undisclosed bidders, said in a statement cited by the Financial Times on its Web site.

British Telecom has cut its debt by 37% since May by selling assets. The company, which last week reported a first-quarter loss before one-time items, raised $8.4 billion in June by selling stock to existing shareholders and has sold stakes in some wireless companies, most of its British real estate and a yellow-pages unit.

Babcock & Brown, a U.S. asset-finance company, and Chancery Lane Capital, a New York investment bank, led the bid for the lines and exchanges linking 25 million people with the phone network, the Sunday Times said. British Telecom rejected the offer last week, the paper said.

Several European telephone companies also have expressed interest in buying British Telecom's stake in Blu, including Telefonica, Spain's largest phone company, Sunday Business said, without citing sources. Telefonica holds a license to offer faster wireless services in Italy and could gain customers by buying Blu.